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Tuesday, March 31, 2009

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Indian equity benchmarks bounced back and ended with smart gains on Tuesday, but profit booking in the last hour of trade trimmed gains. Midcaps, which began on a subdued note, ended outperforming the key indices.

The market began on an upbeat note tracking positive Asian markets--up on hopes of a stimulus package from Japan. Strong opening of European markets later in the day helped gain momentum. Apart from value based buying, domestic institutions were seen churning portfolios. Action was seen in capital goods, pharma, realty and auto space. Mutual funds normally buy stocks which hold higher weightage in their portfolios to spike up net asset values.

“Domestic institutions were in action propping up NAVs before the closure of financial year. Meanwhile, it was the fist day of financial year for FIIs in F&O segment and they also bought. Traders turned aggressive following gains in Asian markets and rally in Europe,” said Anita Gandhi, head institutional business, Arihant Capital.

Bombay Stock Exchange’s Sensex closed at 9708.50, up 140.36 points or 1.47 per cent from Monday’s close. The index touched a high of 9826.22 and low of 9547.21 in the day. National Stock Exchange’s Nifty ended at 3020.95, up 42.80 points or 1.44 per cent. The 50-share index hit an intra-day high of 3054.30 and low of 2966.40.

“Underlying current is slightly bullish. Upward momentum may continue for next 8-10 days and then fourth quarterly results will take over,” Gandhi added.

Huge buying was seen in the tea pack on reports that global production of the beverage may see a shortfall in the January-March quarter due to the prevailing dry spell in the major tea producing nations. Indicative figures show that production is already down by 14 million kg, with Sri Lanka being the worst hit. Shares of Mcleod Russel ended up 15.17 per cent, Williamson Magor closed at 10 per cent higher, Assam Company was locked at 10 per cent circuit and Jayshree Tea ended 20 per cent higher.

European markets pulled back after two days of losses led by banks ahead of G20 meeting. At 5:15 pm IST, FTSE 100 gained 2.91 per cent, CAC 40 moved up 1.52 per cent and DAX advanced 1.42 per cent. Wall Street is also expected to open in the green. Dow Jones futures was up 0.87 per cent, S&P 500 futures moved 0.87 per cent higher and Nasdaq 100 advanced 0.98 per cent.

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